Has given shares of IT service provider Persistent Systems multibagger returns As of now this year (Y-to-date) has risen by over 140%, while IT stocks have risen by almost 180 per cent in a span of one year. Brokerage and research firm Emkay has given ‘Buy’ rating on Multibagger stock.
Persistent Systems provides digital engineering and data and artificial intelligence products to the software, banking, financial services and healthcare sectors.
The brokerage said the company has entered into an agreement to acquire Software Corporation International (SCI) and its affiliate Fusion 360 LLC for a cash consideration of $53 million. It has also signed an agreement to buy certain assets from Shree Partners LLC USA and do business with its Indian subsidiary Shree Infosoft Pvt. Ltd. for a cash consideration of $6.87 million.
SCI brings domain consulting capabilities and expertise in payment solutions, integration and support services for major US banks. “The deals should strengthen PSYS (Persistent Systems) BFSI/payment and cloud capabilities. The acquisition of SCI and Fusion360 will help PSYS take advantage of the spurt in demand for payment modernization. “The cross-selling opportunities among existing customers and access to the marquee logo augur well for revenue growth in the medium term,” Emkay said in a note.
However, considering the size of the deals, the brokerage does not expect any meaningful revision in its earnings estimates. It has a Buy rating on the stock with a target price of ₹3,700 per share.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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